With capital growth slowing, the focus for Tritax Big Box Reit (BBOX) is on providing stable income. Investors will be reassured that management outlined a target dividend of 6.4p a share for 2017 when delivering the previous year's results. At the present share price, that presents a respectable 4.3 per cent forward yield.
A lower revaluation gain of £48m (2015: £107m) on the portfolio pulled down the warehouse landlord's pre-tax profit last year. The good news was demand for storage facilities continued to outstrip supply, pushing up net rental income by 70 per cent to £75m. Partner and fund manager Colin Godfrey says the growth of e-commerce, as well as desire by retailers to reduce their storage and distribution costs, is driving demand.
Ten 'big boxes' were acquired during the period, diversifying the fund's tenant mix and geographical exposure. New tenants included Amazon (US:AMZN), Dixons Carphone (DC.) and Kelloggs. The fund has been trying to decrease its reliance on supermarket clients: Tesco (TSCO) is its largest single tenant exposure at 8.7 per cent of rental income. Four forward-funded (and pre-let) developments were also completed.
Analysts at Liberum expect an adjusted net asset value (NAV) of 128.7p at December 2017, compared with 129p the previous year.
TRITAX BIG BOX REIT (BBOX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 148p | MARKET VALUE: | £1.64bn | |
| TOUCH: | 147.9-148p | 12-MONTH HIGH: | 149p | LOW: 114p |
| DIVIDEND YIELD: | 4.2% | TRADING PROPERTIES: | nil | |
| PREMIUM TO NAV: | 16% | NET DEBT: | 26% | |
| INVESTMENT PROPERTIES: | £1.8bn | |||
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 98 | - | - | - |
| 2014* | 107 | 42 | 15.1 | 4.15 |
| 2015 | 124 | 134 | 21.6 | 6 |
| 2016 | 128 | 92 | 10.5 | 6.2 |
| % change | +3 | -31 | -51 | +3 |
Ex-div: ** Payment: ** *For the period 1 Nov 2013 to 31 Dec 2014 **Third half-year dividend of 1.55p a share to be paid on 17 Mar | ||||
